Moody's affirms USI

Moody's Investors Service said it affirmed the B1 rating on the senior secured credit facilities of USI Holdings Corp. following the company's announcement that it seeks to raise an additional $100 million of term loan debt through the accordion feature in its existing credit agreement.

The outlook is stable.

The company intends to use proceeds repay some borrowings under its revolving credit facility and to fund potential acquisitions.

The agency said USI's rating reflects the company's expertise in serving small and mid-sized businesses, its strategic focus on cross-selling to strengthen client relationships, its healthy operating margins and its good financial flexibility.

These strengths are tempered by the company's modest size relative to the largest global brokers, by the integration risk associated with its acquisition strategy, by uncertainties surrounding a recent court verdict against USI in a copyright infringement case and by ongoing, industry-wide regulatory investigations into brokerage compensation practices, Moody's said. The rating has also been constrained by the company's volatile net results over the past few years, reflecting acquisition integration costs, restructuring charges and the effects of discontinued operations.

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